Energy giants Equinor, Shell and Exxon Mobil have concluded talks with the Government of Tanzania over the construction of a mega LNG export facility in the East African country.
The agreement is viewed as a major step in the long-delayed initiative to tap Tanzania’s vast but remote offshore gas resources.
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The energy companies involved in the talks expect the project to cost tens of billions of dollars.
Equinor noted that the agreement consists mostly of a production-sharing agreement and a regulatory framework provision by the host government.
However, the deal, according to Equinor, is subject to legal reviews and quality assurance.
A final deal is expected to be signed by the parties involved in the coming weeks.
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By GlobalDataEquinor said: “We look forward to continuing the journey with Tanzania in the coming years to achieve the series of milestones needed that can move this project towards a final investment decision.
“The signing of the agreements will be an important milestone and the Tanzanian Government deserves credit for the hard work, collaboration and determination it has shown throughout this process,” added the company.
Tanzania’s chief negotiator Charles Sangweni said the agreement also involves land use and security.
Sangweni told Reuters: “We are happy it is a big step towards the implementation of the project although we have a lot to do. If everything goes well as planned, I am confident that the final investment decision will be reached in 2025.”
Equnior’s Tanzania country manager Unni Fjaer said in a LinkedIn post: “The work doesn’t stop with the coming agreements being signed.
“After we iron our suits and refill our coffee cups (or tea!), we will be again on the move to meet our Tanzanian government counterparts to progress our joint journey towards the next milestones.”
Shell vice-president for Tanzania and country chair Jared Kuehl said in a LinkedIn post: “Important negotiations with the government of Tanzania have concluded. Subject to successful completion of the assurance process over the coming weeks, we anticipate signing an HGA that covers the onshore elements of the project and a PSA that oversees its upstream component.”
Equinor and Shell discovered more than 20 trillion cubic feet of gas in Block 2 offshore Tanzania.
Also, Shell operates Block 1 and Block 4 in Tanzania. These blocks have total estimated recoverable gas reserves of 16 trillion cubic feet.
The capacity of the proposed LNG export facility in the country’s south-east Lindi region is expected to be at least ten million tonnes per year.
